Is it to take deposits of cash and turn them into Bitcoins?I understand that.

If it doesn't have that feature then it seems pointless.You can transfer bitcoins on your cell phone.

It would be interesting if the ATM took cash and gave you back bitcoins in the form of paper backups of bitcoins. Like, if you gave it 50EU and it gave you back a stack of paper in any denomination you chose, like two bitcoin backup slips worth 20 EU and one 10 EU paper backup slips. They could exchange them like cash. Of course, it would be impossible to prevent double spending, because how do you know if I already moved the balance from the paper slip into my private account before I give you the slip? Maybe print it with a scratch off area over the private key, so if the scratch off area is scratched the slip becomes worthless for transactions? That's probably easily defeated, though. I guess they would have to print some kind of voucher for bitcoins, like a BTC backed currency or something. They would probably get in trouble for starting their own currency at that point.